Go Air cancelling key sectors from June to August – Is it just pilot crunch or more?

The Wadia group owned Mumbai headquartered airline Go Air which has been in the news recently for exodus of pilots has reduced flights in June and July. This comes at a backdrop of already reduced operations in April and May. I had tweeted about how the airline saw lower departures at both Mumbai and Delhi in the month of April. Go Air was the only airline to see a drop in number of departures in April.

While the airline is proceeding ahead with cancellations it is not even close to 10% as reported by media. The airline operates a little over 140 flights per day.

Going by its schedule page on the airlines website – www.goair.in (https://www.goair.in/flight-schedule) and booking engine, the airline will pull out of Kolkata – Bagdogra sector where it operated single flight a day. This pullout is effective beginning of June. The airline will still operate a few flights in June, which looks more like on days where it has group commitments or high forward loads.

The most surprising of cancellation is on the Mumbai – Chandigarh – Mumbai sector, where the airline once was the only low cost carrier and capacity leader. The airline will reduce frequency from thrice daily to double daily from 1st July to 19th August. Go Air sees competition from IndiGo and Jet Airways on this sector. Interestingly, the flight being pulled out is a late evening departure, which would typically see good loads and higher yields.

For an even longer period of time, the airline will reduce one frequency on Mumbai – Kochi – Mumbai route, where it will operate with just one frequency from 1st June to 19th August. This sector sees competition from Air India, Jet Airways, IndiGo and Spicejet.

The cancellations also extend on the lucrative Delhi – Leh – Delhi sector which sees reduction in frequencies, much before the tourist season ends.

While Air Asia and Vistara will not be expanding immediately, Spicejet and IndiGo may tweak their network to launch temporary additional flights or the lack of capacity will certainly drive up the fares which will help improve yields for the competition on the sectors being affected.

There is speculation that the reduction is not only on the basis of pilot shortage but also some cash crunch. Similar speculations were making rounds when the airline had not taken delivery of its 20th aircraft, which could have helped it start international flights.

Go Air will see reduction fleet utilization from June to August. It needs to be seen if the flights would be back in August or would extend further considering July to September is traditionally a weak period.

After the departure of Giorgio de Roni – the longest serving CEO of the airline on health grounds, the airline is being led by Managing Director – Jeh Wadia and CCO – Tim Jordan, an Australian who recently joined the airline and has no prior experience of Indian market.

The airline is actively looking for another expat CEO to take the airline further as the delivery of its 72 A320 NEOs on order will start in early 2016.

A change in leadership will not help tide over the pilot crisis for an airline which has lowest foreign pilots on rolls amongst major airlines in India and may well have to go on a hiring spree at foreign shores, thus increasing costs but protecting operations.

The airline will also see its market share decline from May to August, but see higher load factors in May – not only because of peak season but also because of cancellations and combinations of flights.

The situation may not be as bad as what is being projected, but certainly is not at its best and it will be interesting to see how the management steers clear of this turbulence.

4 thoughts on “Go Air cancelling key sectors from June to August – Is it just pilot crunch or more?”

I doubt pilot shortage is the main reason for reduction in network but yes one of the important reason. Cash crunch sounds very reasonable. The real picture will come to know from balance sheets, but its a private company. What in near term we can expect is IPO to raise capital for fleet acquisition. What I see on the long term, somewhere over horizon is another round of consolidation in Indian Airline Industry. Interesting days ahead.

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